Opening day oversubscription of key IPOs positive

Monday, 18 December 2017 00:00 - - {{hitsCtrl.values.hits}}

The oversubscription of two key Initial Public Offerings (IPOs) last week is being viewed as very positive despite sluggish sentiment in the capital market of late.

The Rs. 1.2 billion worth IPO by LVL Energy Fund was the biggest in four years whilst the Rs. 750 million Issue by Jetwing Symphony is also significant as it is by a family-owned business group.

“The fact that both IPOs were closed on their official opening day following oversubscription is very positive and encouraging. It affirms that there is demand for good value IPOs and not all lost in the Colombo Bourse,” stock market analysts opined.

Despite the positives, the Bourse on Friday closed at its lowest level in eight months and marked the sixth consecutive weekly dip. Since the first reading of Budget 2018 in early November, the ASI has dipped 3.3%.

Nevertheless, year-to-date, the All Share Index is up 2% and the S&P Sri Lanka 20 Index is higher by 5.6%.

A redeeming feature remains the overall bullish foreign investor interest in Lankan equities. Net foreign inflow has crossed the Rs. 18 billion mark year-to-date.